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You did a great job with your analysis of distressed markets with short sales and foreclosures. Being that I am on the west side of Chicago and looking to buy in gentrifying neighborhoods such as Logan Square where prices went up too fast, I will find the right distressed property when I am ready to pull the trigger, just not sure if it will be before Christmas or not as there are a lot of ARMs resetting in the coming months. Short sales and foreclosures are a pain and this is why I work with an agent who specializes in short sales and foreclosures (over 100 short sales in the past 5 years).
All my real estate contacts are telling me late this year will be the best time to pick up a short sale but my gut says with all these ARMs resetting spring might be better. But either way I will be looking to start putting down offers beginning in the next 3-6 months and see how it goes. As they say, pigs get fat, hogs get slaughtered.
You did a great job with your analysis of distressed markets with short sales and foreclosures. Being that I am on the west side of Chicago and looking to buy in gentrifying neighborhoods such as Logan Square where prices went up too fast, I will find the right distressed property when I am ready to pull the trigger, just not sure if it will be before Christmas or not as there are a lot of ARMs resetting in the coming months. Short sales and foreclosures are a pain and this is why I work with an agent who specializes in short sales and foreclosures (over 100 short sales in the past 5 years).
All my real estate contacts are telling me late this year will be the best time to pick up a short sale but my gut says with all these ARMs resetting spring might be better. But either way I will be looking to start putting down offers beginning in the next 3-6 months and see how it goes. As they say, pigs get fat, hogs get slaughtered.
Humbolt, you are scaring me. I put my offer in on a short about a week and half ago. I've heard that short-sales are a pain for Realtors to work with. If my offer was only a few thousand below the MLS price, can I expect a response from the bank sooner? Or is it just a long drawn out process as banks take their time moving the paperwork? How long do short-sales typically take?
I don't really have a concrete answer for you. If your offer is only slightly below the MLS the bank may be faster to get back with you than if you had really low-balled them. Banks have been taking too long that is for sure to get the short sales completed. I would say it could take 1-2 months but I have heard of it taking up to 6 months to wrap it up. Most likely you are talking weeks, not months.
It will vary from lender to lender and area along with the pricing level you set. Don't be surprised if the whole process takes 3 months.
I don't really have a concrete answer for you. If your offer is only slightly below the MLS the bank may be faster to get back with you than if you had really low-balled them. Banks have been taking too long that is for sure to get the short sales completed. I would say it could take 1-2 months but I have heard of it taking up to 6 months to wrap it up. Most likely you are talking weeks, not months.
It will vary from lender to lender and area along with the pricing level you set. Don't be surprised if the whole process takes 3 months.
Urg! This is very frustrating to no end. You'd think that a bank would die to unload this property on anyone who make a decent offer on it. I hope to hear something very soon as I really don't want to wait long to move and get settled in before the school year starts up again this fall. I have another property that recently turned up, that I would like to take a look at that is still owned by the seller. If this short-sale takes too long, and I hope it doesn't because I really like it, then I might jump on the other property simply because I only have to deal with the seller and not the "short-sale" game. Oh well, good things come to those who wait?
Thanks for your input, Humbold1t. I appreciate it.
The info I have from several sources is that banks have some old rules about the "write down of assets" -- they have to make their systems adapt to a MUCH larger volume of these than EVER before. If they don't have the right oversight in place they could totally end up destroying their balance sheet.
Of course if the asset was valued completely unrealistically they have a bigger impact.
They also have costs associated with these systems changes -- these are not budgeted upgrades, these are "new" scale of problems.
No matter if you are making a bid a few thousand below what is owed to the bank or some total firesale discount the chain of approval and implications to all the lenders is huge. Multiply even a small "discount" by the large number of bad loans and the "material event detrimental to current position" is certain -- regulators will have to take over some of these lenders...
Quote:
Originally Posted by Crimmy
Urg! This is very frustrating to no end. You'd think that a bank would die to unload this property on anyone who make a decent offer on it. I hope to hear something very soon as I really don't want to wait long to move and get settled in before the school year starts up again this fall. I have another property that recently turned up, that I would like to take a look at that is still owned by the seller. If this short-sale takes too long, and I hope it doesn't because I really like it, then I might jump on the other property simply because I only have to deal with the seller and not the "short-sale" game. Oh well, good things come to those who wait?
Thanks for your input, Humbold1t. I appreciate it.
I wish I could wait and buy next year, but moving the family again is a hassle, and the local move would be at my expense. I've got 5 years at least in the house, so I should be able to recover any short term losses.
I'd be interested in seeing data that suggests Oak Park west of Ridgeland has low crime. I don't know how to "look at those crime stats more carefully" since the only stats I've seen are the overall averages, and they don't look good.
Over the last 8 years or so, the crime index reported by city-data.com ranges from 296 to 368 (2nd highest year was 345), bouncing around the national average. By comparison, LaGrange's crime index bounces from 80 to 132 (2nd highest year was 105). This is a huge difference, which is the source of my concern. If Sukwoo, or others, can shed favorable light on this, I'm listening.
Sure, crime in Oak Park is and always will be an issue. Its much higher the closer you go toward the eastern border of Oak Park with Chicago, but the whole village is very small (3 x 1.5 miles) so its not like you're super far away from Austin even near Harlem Ave. If the crime stats dissuade you, I totally understand. OP is much more urban than LaGrange, and its not for everyone.
You'll get a good idea what kinds of crime take place in OP, and generally where they take place. I'm used to living in big cities, so the level of crime, while somewhat annoying, is tolerable. We have an alarm system in the house, we lock the doors, we keep valuables out of sight in the car, and we don't spend much time walking around at midnight anyway, so the adjustments are pretty minimal for us.
Over the last 8 years or so, the crime index reported by city-data.com ranges from 296 to 368 (2nd highest year was 345), bouncing around the national average. By comparison, LaGrange's crime index bounces from 80 to 132 (2nd highest year was 105). This is a huge difference, which is the source of my concern. If Sukwoo, or others, can shed favorable light on this, I'm listening.
Take a look at the crime maps in the link posted by Sukwoo. You'll see that crime in Oak Park isn't nearly as simple as that "West of Ridgeland" B.S. spewed by many. I'm heavily researching Oak Park at this time, and have been downloading the monthly crime maps for the past year. Here are some trends I've noticed that go against the "East of Ridgeland" conventional wisdom:
1. There is less crime north of Lake Street, even if you go east of Ridgeland.
2. Lake Street, because of it's public nature, has more crime than surrounding areas.
3. The apartment belt along Washington Boulevard tends to have a bit more crime--especially between Washington and Madison.
4. Southwestern Oak Park and Nortwestern Oak park pretty consistently have low crime, but Central-western can be a problem spot near the YMCA and Metra Station.
If you are comparing Oak Park to other suburban communities like LaGrange, you are definitely going to see that Oak Park has more crime. But if you compare Oak Park to a nice city neighborhood like Lakeview, the crime numbers don't seem so bad. It's all relative, and depends on what your comfort level is. Oak Park is sort of a city/suburb hybrid, and is good for people with families who didn't really want to leave the city. I know a lot of Oak Parkers, and very few of them feel beseiged by crime. The biggest complaint I hear is garage break-ins and bicycle theft. My Mother's friend's son was carjacked in his garage about ten years ago. It can happen! But of course, he moved to Berwyn and now desperately wants to move back to Oak Park to raise his family. Even that incident didn't sour his opinion of Oak Park!
The info I have from several sources is that banks have some old rules about the "write down of assets" -- they have to make their systems adapt to a MUCH larger volume of these than EVER before. If they don't have the right oversight in place they could totally end up destroying their balance sheet.
Of course if the asset was valued completely unrealistically they have a bigger impact.
They also have costs associated with these systems changes -- these are not budgeted upgrades, these are "new" scale of problems.
No matter if you are making a bid a few thousand below what is owed to the bank or some total firesale discount the chain of approval and implications to all the lenders is huge. Multiply even a small "discount" by the large number of bad loans and the "material event detrimental to current position" is certain -- regulators will have to take over some of these lenders...
Chet, thanks for all of that info. (A lot of which flew over my head.)
If you are comparing Oak Park to other suburban communities like LaGrange, you are definitely going to see that Oak Park has more crime. But if you compare Oak Park to a nice city neighborhood like Lakeview, the crime numbers don't seem so bad. It's all relative, and depends on what your comfort level is. Oak Park is sort of a city/suburb hybrid, and is good for people with families who didn't really want to leave the city. I know a lot of Oak Parkers, and very few of them feel beseiged by crime. The biggest complaint I hear is garage break-ins and bicycle theft. My Mother's friend's son was carjacked in his garage about ten years ago. It can happen! But of course, he moved to Berwyn and now desperately wants to move back to Oak Park to raise his family. Even that incident didn't sour his opinion of Oak Park!
Good point about public areas versus private/secluded areas. Public areas have more people (who are often pedestrians) resulting in more potential crime victims to target. Public areas will also have retail which results in more opportunities for theft/shoplifting.
On the other hand, public places with high foot traffic also deters crime due to the presence of so many potential witnesses/good Samaritans. This is one reason Manhattan is so safe. There are tons of people out at all hours of day or night. Crime victims in OP tend to be pedestrians who are in public areas during low traffic times (eg 2 AM on Austin Blvd.) Obviously there are exceptions.
Chet, thanks for all of that info. (A lot of which flew over my head.)
Banks/mortgage lenders that allow a "short sale" or sell their bank owned property out of foreclosure for less than what is owed by the borrower are taking a loss. Whether that is a big loss or a just a small one they do not like to do this and have no way of "clicking a button" to OK the loss.
Just about each and every one of these sales has to be scrutinized by some kind of "loss review panel" internal to the lender. If these losses mount up the lender will end up with some real problems. Those problems could result in the bank getting into a situation where their assets are not in line with what are required by the regulators.
BTW -- Just to stop anybody from going crazy -- most banks do not have a great big pile of mortgages. Mortgages are/were consolidated and re-sold very readily. The lenders making decisions on the consolidated mortgages are in a very different position than the big banks that had loans to Latin American countries and similar things. The result of that kind of crisis was that banks work very hard to find third parties to hold the "asset" portion of most loans. The banks merely 'service' the loans and the third parties in turn try to minimize their potential downside with all kinds of fancy contracts like "collateralized debt obligations". The trading of these is what keeps the system liquid. When the traders worried that the risk of these obligations were misstated they began to panic / look for a way to offset the risk of non-payment. One of those offsetting risks was to trade the stock of promoters of these instruments, like Bear Stearns, into oblivion.
I am sure that Frontline is working on a nice PBS TV show that will explain all this with their somber voiced narrator...
Last edited by chet everett; 06-11-2008 at 11:02 AM..
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Put my offer in on a short sale last week.
